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Low cost flying arrives in luxury loving Japan

Wednesday - 10/3/2012, 2:16pm EDT

By YURI KAGEYAMA
AP Business Writer

NARITA, Japan (AP) - Japan has a reputation for loving expensive things like overpriced real estate, gourmet melons and luxury brands. But the nation is finally discovering the joy of flying cheap, with the arrival this year of three low-cost carriers.

The takeoff of AirAsia Japan, Peach Aviation and Jetstar Japan could change lifestyles. No longer will air travel be mostly confined to business trips and fancy once-in-a-lifetime vacations to places such as Hawaii.

Flying is suddenly growing more casual, including for weekend dining, visits with friends, even day trips. Ticket prices are plunging by about half, to 16,000 yen ($200) trips to the southwestern resort island of Okinawa or a 5,000 yen ($60) hop to Seoul.

The airlines are not only out to woo Japanese away from regular leisure activities such as spending money at Disneyland or watching a movie. They are also out to convince the notoriously workaholic Japanese not to work so hard.

They may revitalize Japan's 3 trillion yen ($38 billion) aviation market _ already the world's third largest, comprising about 5.5 percent of global traffic and 11 percent of industry revenues _ that critics say is untapped for its tremendous potential.

Helping to drive the change is the expansion of two Tokyo airports, Haneda and Narita, which has opened up more landing slots for airlines.

Twenty-two-year-old graduate student Chie Kodama recently used Jetstar for an urban planning research trip to Okinawa, and was surprised at how the planes were "normal," like any other airline's.

"And it is so cheap you forgive any shortcomings," she said.

As with other low-cost carriers around the world, flyers get charged for meals and extra luggage. Efficiency is critical and so the airlines use online advertising and reservations, fit more seats into each jet, and take off quickly after landing.

Booking early is a must for the best deals, and refunds and schedule changes aren't allowed. The gates are typically at the farthest end of airports. Flights are sometimes delayed. The wait feels longer because LCC users have to check in extra early.

Masato Yamaguchi, 22, said his friends had to run like mad when their AirAsia flight back to Tokyo from Okinawa was delayed, and they barely had time to catch the last bus.

As he noted: What would be the point of having to pay hundreds of dollars for a cab home, if they had endured the cramped space of a low cost carrier to pinch pennies?

"There was no way to cross your legs," Yamaguchi grumbled. "You wouldn't want to use it if you're going someplace far away."

Still, the carriers are doing well so far.

During the nation's Obon holidays in August, domestic flights at Peach were 94 percent filled, those at AirAsia were at 91 percent and at Jetstar, 89 percent. The companies are hoping to do as well for the year-end and New Year's holidays.

"It's not that the meals on standard fares were ever free. The charge was just part of the ticket price," Kazuyuki Iwakata, president of AirAsia Japan, told The Associated Press. "With us, people pay only for what they need."

As a marketing ploy, AirAsia Japan, which started operations in August, offered tickets for just 5 yen (5 cents) to the first 10,000 people. They quickly sold out.

During the go-go "bubble years" of the late 1980s and early 1990s, Japanese were especially seen as finicky consumers who delighted in 3,000 yen ($30) cups of fancy coffee and snatched up 500,000 yen ($5,000) designer bags.

Such spending has lost some of its glamor as Japanese become less status-conscious, perhaps poorer and look for discounts. Such shifts in consumer tastes is underlined in the popularity, for instance, of Fast Retailing Co.'s no-nonsense Uniqlo clothing chain, which is also opening shops in the U.S.

Geoffrey Tudor, analyst with Japan Aviation Management Research, said low-cost carriers are introducing the fun of flying to young people and retirees. They are also popular with families who live apart to juggle work assignments and children's education needs _ a practice so widespread a special phrase has been coined to describe it, "tanshin funin."

Jetstar Japan Chief Executive Miyuki Suzuki said a tenth of those who use her carrier are first-time fliers.

"We aim to grow the piece of the pie," she told reporters recently. "People can travel more for less and have many more experiences."

Jetstar Japan is a third owned by Australia's Qantas Airways Ltd., and a third owned by Japan Airlines Co., which is making a soaring comeback, thanks to a 350 billion yen ($4.5 billion) government bailout from bankruptcy two years ago and generous tax breaks that continue for several years. Mitsubishi Corp. and Century Tokyo Leasing Corp. are its other shareholders with 16.7 percent each.